Your home is a valuable asset, and you need to take steps to protect it—along with its contents—against misfortune. To do that, you have numerous types of home insurance policies that offer various levels of coverage. To help you choose the level of protection that's right for you, below are some of the most common types of homeowners insurance.

3 Popular Types of Home Insurance Policies

1. Limited Coverage

Basic form, or limited coverage, policies are among the most inexpensive, but they provide coverage only in certain cases. Most only cover "named" perils, which means anything not listed as covered in the policy document is excluded.

They typically cover 10 common hazards, including fire, theft, vandalism, lightning, explosions, and hail. They do not normally cover the contents of the house or liability coverage. Because of this, many lenders require borrowers to maintain more coverage than this type of policy provides.

2. Special Form

Although they are called "special" form these, policies are, in fact, the most common type of home insurance. They are also called "HO-3" coverage. They include all perils except those specifically excluded. Common exclusions include flood and earthquake damage, but they do cover loss and theft of personal property.

Moreover, they offer liability coverage. This pays for repairs and medical bills if you or a household member—including pets—should accidentally injure someone or damage their property. It also pays for legal costs that arise out of the incident.

3. Older Home

HO-8 policies are specifically designed to cover houses more than 40 years old that do not meet the requirements for an HO-3 policy. For instance, if your insurer will not sell you a special form policy until you update the roof, plumbing, or electrical system, you can purchase an HO-8 policy that provides some protection while you have the house renovated.

Older home policies are named peril policies, and the amount you receive on a claim depends on the home's actual cash value—meaning its replacement cost minus any depreciation. Note that the actual cash value is often considerably less than the replacement one.

To have a friendly, knowledgeable agent help you design a home insurance policy that meets  your individual needs, contact Charles Adams Insurance Agency. They have served Eastern Kentucky and Southern Ohio for more than 100 years and have built a reputation for quality coverage and impeccable customer care. They also specialize in business, renters, life, and auto insurance. You can learn more about the company at their website or call them at (606) 325-9709 to request a home insurance quote.